NFTs – Should You Invest?
We’re hearing more and more reports of NFT sales in the tens of millions of dollars, but how lucrative are they overall? Is it truly worth our money to invest in them? Let’s take a look…
NFTs are relatively new and intriguing phenomena. Having been around since 2014, NFTs are unique tokens that are intended to identify ownership of a certain digital artwork. They are shaking up businesses all over the world.
A product or asset that may be traded for another good or asset of equivalent value is referred to as “fungible.” A $1 bill, for example, is fungible because it can simply be swapped for another dollar. So, for something to be non-fungible, it simply needs to be one of a kind.
An NFT demonstrates exclusive ownership of a digital asset, although you may buy an NFT at a set price, its market value is likely to change since it is non-fungible.
NFTs have sold for tens of millions of dollars, with one, The Merge, bringing in little under $100 million. As a result, the question arises: should we all consider investing in them?
Should We Be Investing In NFTs?
Like with all other investment types, NFTs pose a financial risk. While there is of course a chance that you could get lucky and make millions of dollars, there’s an even greater chance that you’ll either gain nothing or even completely lose your investment.
How you choose to invest your money is up to you, and if you feel the NFT trend is going to be heading in the same direction that cryptocurrencies like Bitcoin did, then go for it, as long as you’re only risking the equity that you can afford to lose, as should always be the case.
While we can’t stress enough that investing in NFTs is a huge financial risk, there are a number of arguments in favour of such an investment. Here are 4 reasons you should invest in NFTs:
1. Ability To Resell
The majority of individuals buy NFTs with the intention of reselling them and profiting. Due to the scarcity of some of these collectables, if you invest in the appropriate NFT, you may make a lot of money. If you can make good investments, NFTs have a lot of potential to provide you with excellent profits.
2. Owning Something Unique
The NFTs’ exclusivity is another factor that makes it a one-of-a-kind experience for traders, and the fact that they cannot be forged makes them even more precious and valuable. In most circumstances, each artist or seller will have a small number of NFTs, implying that such collectables will have a greater chance of retaining their value. Which is, once again, beneficial to an investment.
3. Financial Security
For many traders and investors, the security of an investment choice is a critical aspect in deciding whether or not to engage. As a result, when it comes to NFTs, an investor may be confident of their safety. Owing to the way the blockchain market operates, investors do not have to be concerned about data loss that could render their investments worthless.
4. Decentralized Marketplace
NFTs are an unusual investment choice, but since they are a decentralised market, artists may profit directly from their work. NFTs reduce the need for intermediaries and the fees they must pay, which benefits investors as well. Additionally, as a result of this, the original developers of an NFT will be able to receive a fee each time that NFT changes hands. This decentralised method distinguishes the NFT market from many others, unlike many others.
How Much Can NFTs Be Worth?
When thought of simply as an art piece, there is no cap on how much NFTs can eventually be worth.
Right now, particular NFTs are selling in their tens of millions, with many being worth at least four figures. Who decides how much they’re worth? Well, when it comes to art, beauty is in the eye of the beholder.
However, just because one person feels an NFT is worth $10 million in their eyes and that they’re willing to spend that much, doesn’t mean that somebody else will come along and value it equally or even higher which is where a profit would be made.
Here are 3 of the highest NFT sale prices to date:
1. The Merge – $91.8 Million
The Merge, which was created by digital artist PAK, is the highest priced NFT sale so far, fetching $91.8 million on Nifty Gateway. In the case of The Merge, though, there isn’t a single owner of the NFT, since almost 30,000 bought the piece collectively.
The Merge was made available as an open edition, which is the contrary of a limited edition. Buyers may acquire any number of tokens for $575, with the price increasing by $25 every six hours. The tokens sold for a total of $91.8 million in the conclusion.
2. Everydays: The First 5,000 Days – $69.3 Million
When it comes to rewarding consistent, hard work, the art industry may not have a better example out there than Beeple. Beeple set out to create a new digital art piece every single day, and after the first 5000 days (and artworks) decided to put the collection up for auction.
When the collection fetched him $69.3 million at Christie’s Auction House, Beeple responded with a single tweet featuring the words “Holy F***”. While he obviously knew his art was worth a lot of money, it’s clear he wasn’t expecting quite a sum.
3. Clock – $52.7 Million
‘Clock’ was a collaboration between successful digital artist PAK and WikiLeaks founder Julian Assange, virtually functions as a clock, recording the days that Assange has been locked up.
‘Clock’ was purchased by AssangeDAO, a group of over 10,000 individuals who pooled their money to buy the artwork in support of Julian Assange, with the goal of generating money for a legal defence.
Jake McEvoyJake is a professional copywriter, journalist, and life-long fan of technology. He covers news and user guides for KnowYourMobile.
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